Saas

Will designers design first in a world where AI can code software immediately, or just describe the design? Will large enterprises pay for premium observability when AI can migrate & monitor open source competitors?

As Michael Mauboussin writes, there’s information in price. These questions are priced in. It’s too early to see revenue erosion, but the market is pricing in the risk.

The median SaaS stock is down 14-17% year to date. 64% of software companies are down. Adobe has fallen 32%, HubSpot 57%, Atlassian 54%.

As the world follows every whisper & rumor from AI, what has happened to public SaaS?

The answer is not much! All the fun is in the private markets.

Multiples haven’t moved outside of a narrow band since the post-Covid crash in 2022.

Even here, AI is the story, with AI SaaS companies seeing different valuation correlates : revenue growth. Meanwhile, non-AI SaaS companies are valued more broadly with efficiency metrics included.